Aviva posted a 25% jump in operating profit to £2.203 billion for 2025, with its takeover of Direct Line and strong results across the group helping the British insurer hit its 2026 financial targets a year early.
The results cap a fifth straight year of profitable growth for one of Europe's biggest insurers. Group earnings per share climbed 17% to 56.0p, IFRS profit surged 50% to £1.054 billion, and return on equity reached 17.5%.
The £3.7 billion Direct Line acquisition, completed in July, contributed £174 million to operating profit. Even stripping that out, the group still grew profit 15% year on year.
Aviva had faced resistance when it first approached Direct Line in late 2024, with its initial 250p-per-share offer rebuffed as "highly opportunistic," Financier Worldwide reported at the time. The insurer eventually agreed a price of 275p, representing a 73% premium.
Integration has since outpaced expectations. Aviva originally guided for at least £125 million in annual cost synergies but had already doubled that target to £225 million by November 2025.
Hargreaves Lansdown analyst Matt Britzman noted at the time that savings were "well ahead of expectations" and should help restore solvency levels faster. Morningstar assessed the deal as bringing a double-digit increase in earnings per share.
In the UK and Ireland, where Aviva is the largest general insurer, gross written premiums rose 27% to £9.787 billion. UK personal lines premiums jumped 50% to £5.399 billion, largely reflecting the Direct Line book, while commercial lines grew 7% to £3.847 billion.
Ireland premiums rose 9% to £541 million, though Storm Éowyn pushed the Irish combined operating ratio up 3.3 percentage points to 98.1%.
The group's undiscounted combined operating ratio improved to 94.1%, with Aviva guiding for below 94% in 2026.
Research showed that the Direct Line deal nearly doubled Aviva's gross written premiums to £12.7 billion for 2024/25, though DLG's standalone book had carried a combined ratio of 111.7% in its final year - underscoring the scale of the turnaround now under way.
The board declared a final dividend of 26.2p per share, up 10%, and announced a £350 million share buyback. Aviva set new three-year targets including 11% compound annual growth in operating earnings per share through 2028 and return on equity above 20%.
The full-year results come as the insurer also flagged deployment of artificial intelligence across claims, underwriting, and customer experience.
